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My Partner and I Don't Want To Split Our Assets 50:50 If We Separate

 

What can we do if my partner and I don't want our property to be divided 50:50 if we split up?

Deciding on how to split assets at the end of a relationship is never a fun task but the good news is that you can make it easier. You need a “relationship property” or “pre-nuptial” agreement! You might know this as a “pre-nup”, but you don’t have to be getting married to get one of these handy agreements drawn up! A Relationship Property Section 21 Agreement sets out how your property will be shared out if you and your partner decide to end your relationship. These agreements are also referred to as ‘contracting out’ agreements, which refers to the fact that you are ‘contracting out’ of the law which says that all ‘relationship property’ should be split equally if you head to Splitsville.

But do I NEED one? 

While the lawyer in us screams things like “YES! Better safe than sorry!!!”, not everyone needs a s21 agreement. You only need one if you think that something other than a 50:50 split of your assets is fair if you were to separate with your partner. If you think you’ve both contributed equally to the relationship (in whatever way) then the law already says you should be entitled to half. 

If you have assets that you think should be recognised as separate (for example if one partner comes in with a lot more assets than the other), then it might pay to get an agreement drawn up. It also means that you have a guiding document if you don’t part on the best terms.

What is Relationship Property?

In New Zealand relationship property is defined as any home, chattels or other property purchased while in the relationship for the “common benefit” of both parties. Essentially, everything you purchase personally in that relationship could be up for grabs including: property, vehicles, superannuation, life insurance, shares and investments. Even property which you owned prior to the relationship which has been used by both of you (and/or your kids) through the course of the relationship could be seen to be relationship property, which should be split 50:50 if you were to separate.

It’s worth noting here that ‘relationship property’ can only be property owned by a person – not a Family Trust. However, that Trust must have been set up before your relationship started in order to fully protect it from relationship property claims. If you set up a Trust after your relationship starts then your property isn’t protected from a claim from your partner.

What is Separate Property?

The general rule is that any property totally owned by you before the relationship is separate property. However, this isn’t always as simple as it seems. Having a s21 agreement in place means that you can protect that property from any future claim that your separate property somehow became mixed up with your relationship property so now your partner can claim it’s actually relationship property. With a s21 agreement in place there can be no argument. 

“Now I ain’t sayin’ (s)he a gold digga” – Kanye West

It can be awkward to raise this subject with a partner. Sometimes partners respond with “don’t you trust me?”, “do you think we are going to break up?” and in the words of Kanye -  “are you calling me a gold-digger”? If you calmly explain your reasons for wanting a Relationship Property Agreement then often partners are happy to have the conversation, and want to have the security of (a) being able to protect their own property, and (b) knowing what would happen in the event of a break up. 

What do I need to be aware of?

  • Your agreement must be witnessed, and you each must have received independent advice from a lawyer to make the agreement binding.
  • You must disclose all of your assets to each other if you want to rely on this agreement; and
  • Things can change! Make sure you update your agreement regularly. 

Create a Relationship Property Agreement online today

Disclaimer: The information on this page is general information only and must not be relied on as legal advice. Legal Beagle is not a law firm or a substitute for a law firm. We are unable to provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defences, options, selection of legal documents or strategies.

 

 

 

 

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Legal Beagle is not a law firm or a substitute for a law firm. We are unable to provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defences, options, selection of legal documents or strategies.
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